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>The losses for each WeWork member -- about $5,200 per customer -- are about 28 times what Uber loses per active rider. What is the value of those customers th
by rdlecler1 7y ago
>The losses for each WeWork member -- about $5,200 per customer -- are about 28 times what Uber loses per active rider.
What is the value of those customers though? $3500-$12,000/year.
And as I understand the business model, it is really a realestate business so how of the value is in asset appreciation. If you’re buying real estate at pennies on the dollar and using cash flow to pay off debt, then $1.3B in losses may not be a big deal since you really need to look at LTV. If I put down $200k for a house in SF and take on debt for the rest then I am loosing a hell of a lot more money per occupant.
- Areading314 7y agoYes, in addition to having a fake (never-profitable) business, they are also exposed to highly overvalued real estate at the top of a business cycle
- JMTQp8lwXL 7y agoTo be fair, if this was the start of the business cycle, it might not be a bad idea. Real estate had some great deals to be found in 2008 if you had the liquidity to purchase.
- jmole 7y agothat's exactly what mcdonalds did: https://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-beyond-the-burger/ https://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-bey...
- Areading314 7y agoWith the minor difference that Mcdonalds has been making $billions in profit, quarter after quarter for many decades.
- lerchmo 7y agoas far as I know they buy 15 year leases...
- tyingq 7y agoWeWork, in most cases, doesn't own the property. They are subletting.
- mindentropy 7y agoIs this how they avoid paying huge taxes to the Government by taking on additional debt?